RFQ (Request for Quotation)

An RFQ is a document a buyer sends to potential suppliers asking for pricing on a defined, well-specified set of goods or services. It's used when the specification is already fixed and the main thing left to compare is price and terms.

RFQs are typically sent to a shortlist of qualified suppliers rather than the open market, and the responses are compared side by side to inform a sourcing decision — often followed by a reverse auction or direct negotiation before a supplier is awarded the business.

A good RFQ states the specification, quantity, delivery location and date, currency, payment terms, and a submission deadline. Quotes that arrive on the same basis can be compared line by line; quotes that arrive in different formats usually cannot.

An RFQ is different from a purchase order. The RFQ asks for pricing before a decision is made; the purchase order is the commitment issued after a supplier has been chosen.